Detailed Interpretation of Gate's Stock Trading Model

It is no longer new for exchanges to enter the stock trading field. Today, @Gate_zh also announced that it has connected with brokers and officially entered the stock market from the front end.

So what is Gate's access method like?

First of all, in terms of performance, Gate allows users to buy US stocks directly with USDT, such as purchasing $NVDA directly with USDT. Essentially, it is the same as buying stocks with USD; the only difference is that after users buy the corresponding assets, the exchange places orders through brokers.

Therefore, users actually own the stocks directly, and the biggest advantage is that there is no need to worry about liquidity. I have written about this topic before; after connecting to brokers, the exchange uses traditional liquidity that is common across the network, including the NYSE or NASDAQ.

In terms of compliance, although Gate has not disclosed which specific broker it is, I still learned that their broker is compliant in the U.S., and the access model is an Omnibus Comprehensive Account model.

Users on Gate can directly buy U.S. stocks with USDT, for example buying $NVDA, $TSLA, or U.S. stock ETFs directly with USDT. Users do not need to open a traditional broker account beforehand, nor do they need to first convert their USDT into USD and then transfer it to the broker. Instead, after completing KYC at Gate, they transfer USDT into the stock trading function to directly buy, hold, and sell stocks or ETFs.

In simple terms, Gate operates a comprehensive account under the infrastructure of a compliant U.S. broker, where all user stock trades and positions are separated into individual internal sub-accounts at the front end. Gate is responsible for user identity verification, order processing, asset display, internal accounting, and stablecoin fund conversion, while the broker is responsible for underlying stock trading, broker systems, clearing and settlement, and corporate actions as the foundational infrastructure.

This is not quite the same as many people understand, where each user has opened a completely independent account with a U.S. broker. The characteristic of the Omnibus model is that what clearing and the underlying broker see is an integrated account or a partner account, while the details of end users are recorded and allocated through the sub-account system by the partner.

In layman's terms, what users see at the front end is how many Nvidia, Apple, and S&P ETFs they have bought, but not everyone has opened a fully disclosed account with the broker individually. Instead, through Gate's account system and the broker’s sub-ledger capability, each user's orders, positions, cash, and corporate actions are recorded separately.

The advantage of this structure is high efficiency. In the traditional fully disclosed account model, each user has to go through the processes of broker account opening, document review, account establishment, tax forms, fund transfers, etc., which is slow, has a high threshold, and is very burdensome for an exchange that serves a global user platform.

The Omnibus model essentially concentrates the complexity between the platform and broker infrastructure, so that users only need to complete KYC and compliance admission at Gate to participate in U.S. stock trading through the exchange front end.

Therefore, I believe that the core of Gate's move this time is not simply "crypto exchanges can buy stocks now," but rather that crypto exchanges are transforming into comprehensive financial gateways. Previously, exchanges only solved internal trading within the crypto sphere, and users’ funds circulated between BTC, ETH, altcoins, futures, and wealth management.

Now, exchanges are beginning to integrate stablecoins, stocks, ETFs, gold, forex, bonds, and RWA into the same account system, allowing users to switch between crypto assets and traditional assets without leaving the exchange.

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